Monday, March 03, 2008

"I was delighted to read in Judy Shelton's op-ed, "Security and the Falling Dollar" (Feb. 15), that at long last the security implications of the dollar's collapse have made their way into the mainstream media. The dollar's strength (or lack thereof) has been of paramount concern to me, and the subject of many of my statements over the past several years. Decades of manipulation by the Federal Reserve have benefited the government and certain politically-connected firms, while gradually destroying the purchasing power of middle-class Americans. Despite numerous warnings in the past, it is only now at a point of acute crisis that Washington insiders are beginning to awaken to the reality of the end of dollar hegemony.

"While I desire reform of our current monetary system, my own proposals have not been as all-encompassing as Ms. Shelton's suggestion to return to a Bretton Woods-style system. Her recommendation, though, that gold backing should make up a component of a future monetary system, is one that we would all do well to heed. My own legislative proposals focus around eliminating the taxes and laws that dissuade individuals and institutions from using gold as currency or as a backing for currency. By allowing market processes to determine the issuance of currency, we can allow individuals to decide for themselves what currency they wish to use. This would lead to a gradual reintroduction of sound money and avoid the market shocks that occur when monetary decisions are mandated by government fiat."

Since today ended up with the DOW down 300, the price of gold reaching another record high, and other indicators pointing to an economy sputtering into a recession (at one time we used to call it a depression) it's good to see that the MSM is finally catching on to the threat that a falling dollar represents to our national security.

Every year, the Senate Select Committee on Intelligence is briefed by the chief of U.S. intelligence on potential threats to the nation. The list is sobering, but usually predictable and typically includes global terrorism, nuclear proliferation and regional conflicts.

But this year, there was a surprising potential foe: the falling dollar. In his report to Congress last week, Director of National Intelligence Michael McConnell went beyond the conventional world of spycraft. Mr. McConnell specifically acknowledged "concerns about the financial capabilities of Russia, China, and OPEC countries and the potential use of their market access to exert financial leverage to achieve political ends." He noted, in particular, the impact a weak dollar can have on national security: "As the dollar has weakened this year, some oil producers -- such as Syria, Iran, and Libya -- have asked to be paid in currencies other than the dollar while others -- such as Kuwait -- are delinking their currency pegs to the dollar."

This is something that the douchebags in DC haven't been talking about even though the subprime mortgage crisis has been one of the biggest red flags for the past 9 months on the economic and financial health of our country.

Also, don't people see the link that our trillion dollar foreign policy and the 65 trillion dollar future liabilities in Medicare and social security has to our economic and fiscal problems? Our "War on Terror" and our empire around the world has bankrupted us in the short term, and the enormity of our welfare state ensures that the pain is going to last in the long term as well.

The funny thing is that the only options that McCain, Clinton, and Obama offer is more of the same. Obama, to his credit, at least says he wants to get out of Iraq sooner rather than later, but we should also be out of Korea and Europe and Japan as well. But Obama, like the other two, are big government guys.